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2.
The question• Urban slums in most poor countries offer living conditions that seem unacceptable• Why doesn’t the political system face a strong pressure to improve them?• Alternative hypotheses o People are not unhappy with their living conditions o Heterogeneity of needs within the same constituency o Politicians have limited influence on the problems o Slum dwellers don’t vote/ don’t vote on performance o These are not politically salient issues • Voters lack information

3.
What we do?• Provide descriptive data that we hopes informs our understanding of these issues• Collected as a prelude to an intervention described at the end• Three data sets: o A household survey of about 5500 households. • A random sample of 102 of 272 wards in municipality • In each ward about 50 households were sampled at random from the slum areas o Audit of toilets and garbage collection in these slums o A survey of 250 heads of Resident Welfare Associations in these wards

21.
Table 3B: Pension Receipt as a Percent of Eligibility Full Sample By Private Asset Quintile 1 2 3 4 5Any Pensions 38% 36% 32% 36% 45% 40% [.48]Old Age Pension 32% 36% 24% 29% 36% 33% [.46]Widow Pension 46% 34% 50% 47% 55% 45% [.50]Disabled Pension 16% 15% 19% 9% 20% 15% [.37](1) To be eligible for the old age, widow, or disabled pension, an individual musthave an income of less than Rs.48,400 per year and have lived in Delhi at least fiveyears, in addition to being over 60, a widow, or a disabled person. We used yearsin current residence as a proxy for the residency requirement.

30.
Table 8C: Institutional Arrangement for Service Delivery in Delhi*Service DeliveryWater Delhi Jal board, a corporatized state entitySanitation MCD for toilets and drainage, Delhi Development Authority (central government)Garbage Removal Municipal Corporation of DelhiElectricity Privatized geographic monopoliesGovernment Schools Municipal Corporation of Delhi, State Government of DelhiHealth Clinics andHospitals MCD**, Delhi State Government, Government of IndiaPensions Delhi State GovernmentRations Government of IndiaThe Police Ministry of Home Affairs (central government)*Excludes NDMC and Delhi Cantonment Board areas**Main agency involved in preventive and primary health care programmes,dispensaries, clinics and a few hospitals

31.
Councilor spending• Each councilor gets Rs 20 million per year to spend on whatever their areas priority was• About 90-95% got spent.• Plus 5 million to spend on water• Which got spent• But they also have influence o Can get MCD officials to do things o Can influence access to entitlements

45.
Summary• There are problems galore• Voters interests seems relatively aligned• There is a some evidence of political involvement by voters• They do approach political officials for help• There is not much delivery.• Especially the things that seem free to the politician—like entitlements.• What could be going on? o Equilibrium of low expectations?

46.
An intervention• In the 2008 state elections we worked with an NGO, SNS, to distribute report cards on MLAs in randomly chosen slums• This lead to a large increase in turnout and hurt non- performing (from the point of view of the MLAs)• In 2010 a fraction of MCDs (chosen at random) were shown their current report cards and told that there will be another one just before elections• Another group was just told that the report card is coming• Another group will get report cards without being forewarned• Compared to a control group, how do they behave and how do their electoral outcomes change?

47.
Can Government Investment inUrban Public Goods Hurt the Poor? Evidence from Beijing Matthew E. Kahn UCLA and NBER Institute of the Environment Department of Economics and Public Policy 1

48.
Introduction• My work focuses on environmental and urban issues• Green Cities: Urban Growth and the Environment (Brookings Press, 2006)• It examines the causes and consequences of urban pollution• While its evidence is mainly USA based, lessons for LDCs. 2

49.
California Pollution Progress During a Time of Growth California Data on Maximum 1 Hour Reading .6 .4Parts Per Million .2 0 1980 1985 1990 1995 2000 Year The Distribution of Ambient Ozone By Monitoring Station

50.
Government Investment in Public Goods and Economic Incidence• Vehicle emissions regulations and industrial regulation played a major role in causing this progress during a time of population and income growth• As smog levels decline in areas where the poor and minorities tend to live, have these groups enjoyed an improvement in their quality of life?

52.
China’s “Green Cities”• In recent years, I have been studying quality of life dynamics in China’s cities• This is joint work with Siqi Zheng of Tsinghua University• Parallels between my U.S and China Work• As China’s cities grow richer and as the powerful government invests in infrastructure and improving non-market local public goods, does this improve the poor’s quality of life?

53.
My Questions• In recent years, Beijing has made major investments in new subway lines and in building the Olympic Village• How has the private sector responded to these public investments?• How have equilibrium pricing gradients been affected and what implications has this had for income sorting within the city?• Could the urban poor lose from these public investments?

54.
Beijing Public Investment• Four new subway lines were built between the years 2000 to 2009, with the total investment of 50.3 billion RMB.• 20.5 billion RMB was spent to construct the 2008 Olympic Park between 2003 and 2008• The official exchange rate is 6.5 RMB per dollar.

60.
Five Pieces of Evidence• 1. Hedonic pricing of land parcel auctions• 2. Hedonic apartment pricing• 3. Counts of new housing development• 4. Counts of new restaurants• 5. Gentrification by zone• Treatment group: geographical areas near the Olympic Village and New Subway Stops• Control Group: “Treated Areas” early in the construction process and areas far from the place based new public infrastructure

61.
Major Findings• All else equal,• 1. land prices decline with distance from the new subway stops.• 2. home prices decline with distance from the Olympic Village and the New Subway stops and the Old subway stops.• 3. Real estate developers are building more housing closer to the Olympic Village and the New Subway stops but not the Old Subway stops

62.
More Findings• 4. New Restaurants are opening near the two pieces of infrastructure.• Beijing can be partitioned into 114 zones.• 5. Average education is rising and per-capita income is rising in zones closer to the Olympic Village and New Subways (controlling for distance to the CBD)

63.
Missing Individual Level Longitudinal Data• A weakness of our study is “smoking gun” evidence of displacement• We do not know what happened to the poor who lived in these areas and were displaced

64.
Can This Urban Infrastructure Help the Poor?• 1. Beijing financed these investments using revenue from land sales. Likely to be a progressive tax.• 2. Even if the poor are displaced from the “treated area”, improvements to the public transit network are likely to mitigate “Spatial Mismatch”.• John Kain argued that inner-city black unemployment was high in the United States because of commute costs to suburban jobs

65.
My Questions• This work has only focused on China• In India and other LDC cities with booming cities, do real estate prices rise as local amenities improve?• Does this capitalization take place immediately as frictionless models would predict?• If new investments do cause LDC urban gentrification, what is the government’s best response if it cares about equity? Set asides?

66.
Future Work: China’s Bullet Trains• Connecting 2nd tier cities with the Superstar Cities of Beijing, Guangzhou, and Shanghai• Such Trains help to solve an important externality issue:• Achieve Benefits of agglomeration• Without the costs of urban agglomeration (extra pollution and congestion in the mega- city).• Likely to increase human capital in 2nd tier cities and bid up real estate prices there